TMX Group is an integrated, multi-asset class exchange group. TMX Group's businesses operate cash and derivative markets for multiple asset classes including equities, fixed income and energy. We also provide clearing facilities, data products and other services to the international financial community.
LSE perks up TMX takeover bid
London Stock Exchange Group (LON:L) raised its bid for TMX Group (TSE:X) on Wednesday to include a $4 special cash dividend upon the deal's close, trying to stave off competition from rival Maple Group, a consortium of 13 Canadian bidding banks and pension funds.
The sweetened proposal brings the price to $49 per share, higher than the original all-share $45 offer made in February. Maple's hostile bid is currently valued at $48 per share.
TMX has rejected Maple's offer and has re-iterated its recommendation for the LSE merger, which requires two thirds shareholder approval. Stockholders of TMX will have to vote between the two proposals at a meeting on June 30.
In addition to the added special dividend, LSE has also said that the regular dividend after the deal for the combined company would be at least the same as the current TMX dividend, keeping the bid at par with Maple's offer.
"This is great news for shareholders. This special dividend makes the LSEG / TMX Group merger even more compelling," said chairman of LSE, Chris Gibson-Smith.
"Shareholders will benefit from cash upfront, plus the opportunity to participate in the ownership of an international exchange leader.
"Our new progressive dividend policy demonstrates our belief in the exciting growth opportunities and future for LTMX as an innovative and competitive international business."
Last Friday, TMX said that shareholder advisory firm Glass, Lewis & Co., has recommended that shareholders vote in favour of the proposed merger with the London Stock Exchange, saying it's less risky than the rival Maple bid.
According to reports, the shareholder advisory firm, whose opinion is quite sought after in takeover wars, cited the amount of loans Maple plans to use for the deal and the fact that it is more difficult to value the Maple offer as it includes stock that is not yet publicly traded, as reasons for the added risk.
Though the Maple deal would allow more control to the Canadian markets, the deal would also need to overcome real competition hurdles, as its approval would create a monopoly in Canadian exchanges; Maple's bid involves the combination of TMX with both the new trading system Alpha Group, owned by the bidding banks, as well as CDS Inc., which clears stock trades.
Without regulatory approvals, including the Competition Act, for the combination of TMX with Alpha and CDS, the proposed transaction cannot go through. Indeed, Glass Lewis noted that the TMX and LSE combination has a better chance of surviving the regulatory approval process.